Archives : ERRATIC, UNEXPECTED & VOLATILE - 06/07/2018

  ERRATIC, UNEXPECTED & VOLATILE - 06/07/2018.

RANGE TRADING CONTINUES.

Even though the Nifty continued to trade in a small trading range of just 250 points; the price movement can best be described as Erratic, Unexpected and Volatile. Last week the Nifty took support at the lower end of trading range (10550), before bouncing back to test the upper boundary at 10800. Volatility struck at the upper end of trading range and as a result the indices retraced. Nifty closing above 10900 will pave the way for testing the life-high levels, whereas a bearish break on the lower side will pave the way to test the 200dma and the higher bottom at 10417.

 


ERRATIC, UNEXPECTED & VOLATILE - 06/07/2018.

 

RANGE TRADING CONTINUES.

 

Even though the Nifty continued to trade in a small trading range of just 250 points; the price movement can best be described as Erratic, Unexpected and Volatile. Last week the Nifty took support at the lower end of trading range (10550), before bouncing back to test the upper boundary at 10800. Volatility struck at the upper end of trading range and as a result the indices retraced. Nifty closing above 10900 will pave the way for testing the life-high levels, whereas a bearish break on the lower side will pave the way to test the 200dma and the higher bottom at 10417.


TECHNICALLY SPEAKING.

 

Sensex opened the week at 35545, made a high of 35799, low of 35106 and closed the week at 35657. Thus it closed the week with a gain of 234 points. At the same time the Nifty opened the week at 10732, made a high of 10816, low of 10604 and closed the week at 10772. Thus the Nifty closed the week with a gain of 58 points.

 

On the daily charts, both Sensex and Nifty has formed a small white body candle on Friday with an upper shadow. On the weekly charts, both the indices have formed a White body Spinning Top. When combined with previous week, a Bullish Harami has been formed but it cannot be given significance as it has formed in sideways consolidation. Thus daily as well as weekly charts are suggesting a bullish bias.

 

This week, Nifty continued to trade in a trading range between10550-10800. Nifty moved higher towards the upper boundary of trading range before facing some profit-booking. A break above the trading range will push the market towards life-high levels, whereas a break on the downside will lead to test the higher bottom at 10417.

 

Few weeks back, both the indices completed a Bullish Rounding Bottom pattern on the daily charts. It is a Bullish pattern and the target as per that falls at Sensex 36737 and Nifty 11311.

 

Mid-Cap 50 Index (4877) has given a Bearish Head & Shoulders breakout and is now headed towards 4600 followed by 4338. Only a closing above 5100 will negate the bearish breakout.

 

Both the indices had a Weekly Bearish Gap between Sensex 34874-35006 and Nifty 10702-10736. This Gap was aided by 61.8% Retracement of the current fall (Sensex – 34931 and Nifty 10706), which is a Reversal level. This week, both the indices have closed not only above the Weekly Bearish Gap but also above their Reversal level of Sensex 34931 and Nifty 10706. Thus if it remains above the Reversal zone, then the indices will target the previous top.

 

This week, both the indices tested both the short term average of 20dma (Sensex – 35490 and Nifty – 10755) as well as medium term average of 50dma (Sensex – 35258 and Nifty – 10706) and even closed above them. However, both the indices still remain above the long term average of 200dma (Sensex – 34006 and Nifty – 10455). Thus the trend in short term has turned Bullish whereas the trend in the medium term as well as in the long term timeframe continues to remain Upwards.

 

MACD continues in Sell mode whereas Price ROC is in Buy mode. RSI (53) suggests bullish momentum. Stochastic Oscillator %K (53) is above %D and hence in Buy mode. ADX has fallen to 11, suggesting a sideways consolidation and no strength in trend. Directional Indicators are in Buy mode as +DI is above –DI. MFI (47) suggests Negative Money Flow. OBV is making lower top lower bottom formation. Thus Oscillators suggest a mixed bias.

 

Options data for July series indicate highest Call Open Interest is at the strike of 11000 whereas the highest Put build-up is at the strike of 10600. Thus Options data suggests a trading range with resistance at 11000 & support at 10600.

 

INDEX LEVELS:

 

 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

10447

10557

10666

10772

10887

10994

11110

Sensex

34591

34937

35278

35657

35993

36443

36778

 

THIS WEEKS RECOMMENDATIONS:

 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Page Ind

28439

27851

29327

30238

Buy Tata Elxsi

1364

1336

1407

1451

Buy ACC

1374

1346

1414

1457

Buy BEML

837

819

864

893

Buy V-Mart

2812

2738

2927

3045

 

WATCH OUT FOR:

 

ACC
 
VMart

 

 

 

 

 

Disclaimer : The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representations can be made that the recommendations contained herein will be profitable or that they will not result in losses. Readers using the information contained herein are solely responsible for their actions. Information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness.

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